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A Cheaper Way to Provide Universal Health Coverage?

iStockphoto/The Fiscal Times

By Michael Rainey

October 16, 2019

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With Democrats debating a variety of ways to expand access to health care and President Trump promising a “phenomenal” plan at some point in the future, it’s a good bet that there could be significant changes ahead for the U.S. health care system. The leading Democratic presidential candidates spent a lot of time discussing the relative merits of Medicare for All at the debate Tuesday, but that’s just one of several options that are currently under consideration by lawmakers and policy experts.

A team of researchers from the Urban Institute released a study Wednesday that examines different plans for reform. Among other things, they found that it’s possible to deliver universal healthcare without ripping up the current system or driving federal expenditures dramatically higher all at once.

Here are some highlights from the report:

Medicare for All would cost $34 trillion over 10 years. An “enhanced” Medicare-for-All plan that covers everyone in the country (including undocumented immigrants) and offers more benefits than the current system, including dental, vision, hearing and long-term services and supports, would raise national spending on health care by nearly $3 trillion in 2020 and $34 trillion, or $32 trillion after tax offsets, over 10 years. Employer spending on health care would decrease by $955 billion, and household spending would fall by $887 billion, but $2.7 trillion in additional federal revenue would be needed to finance the new program. “It is a big lift to get this kind of money, for sure,” John Holahan, one of the report’s authors, told the Associated Press.

A “lite” Medicare-for-All plan would cost roughly $17.6 trillion over 10 years. A plan that includes some out-of-pocket expenses based on income and a less generous set of expanded benefits would cost about half of the enhanced version. This plan, which would cover all legal residents in the U.S. but not the 10.8 million undocumented immigrants in the country, would reduce national spending on health care by about $209 billion in 2020. Federal spending would increase by $1.5 trillion in the first year, but total health-care spending would fall by about $210 billion as a result of lower provider payment rates and administrative savings.

Medicare for All isn’t the only path to universal coverage. One of the plans in the report, involving a mix of private and public health insurance, would cover everyone in the U.S. except for 6.6 million undocumented immigrants. The plan would beef up Obamacare subsidies, expand Medicaid to all states, provide a public option and cap payment rates. Federal spending would increase by $122.1 billion if implemented next year and by $1.5 trillion over 10 years, but total national health spending would fall by $22.6 billion in 2020.

Sara Collins, a vice president at the Commonwealth Fund, which funded the study, said that report shows that universal health care coverage “can be reached in different ways” – and, we should add, with very different costs.